SAN FRANCISCO (Reuters) - RadioShack Corp RSH.N said on Monday it ended a mobile phone partnership with Target Corp (TGT.N) as the retailers could not agree on a new deal that would be profitable for both companies.
RadioShack, a retailer of consumer electronics and other gadgets, had been helping operate “Target Mobile” stores within 1,500 of Target’s big box locations. RadioShack said that deal will end on April 8.
“In order for RadioShack to have continued this relationship, we needed to establish a new agreement that would be financially appealing to both companies,” said RadioShack Executive Vice President Telvin Jeffries in a statement. “Ultimately, we amicably agreed to dissolve the relationship.”
RadioShack had struggled to make money from the partnership, partly because it sold phones but not the full range of phone accessories available at Target - and accessories tend to have higher profit margins than the devices themselves, according to Scott Tilghman, an analyst at B. Riley Caris.
“RadioShack will lose some lower-margin revenue from this,” Tilghman added.
Target said Brightstar, a leading wireless distributor, and MarketSource, a sales and marketing services company, will take the place of RadioShack in April.
Reporting by Alistair Barr; editing by Andrew Hay and Carol Bishopric